Has the Affordable Care Act Increased Part-time Employment?

August 7, 2015

Because the ACA's employer health insurance mandate applies to individuals who work 30 or more hours per week, employers may try to avoid the mandate by cutting workers\' hours below the 30-hour threshold in order to avoid having to provide them with health insurance, according to a recent study by Aparna Mathur and colleagues. Although the employer mandate only went into effect in 2015, many observers have argued that forward-looking employers began to shift towards a part-time workforce well in advance of the mandate.

To test this hypothesis, relative shifts across two categories of part-time workers (25-29 hours and 31-35 hours) are examined. There is some evidence of a shift from the 31-35-hour category into the 25-29-hour category after the passage of ACA in March 2010. However, that shift is not more pronounced among low-wage workers or among workers in industries and occupations most likely to be affected by the mandate. Thus, there is little evidence that the ACA has caused the shift across the hours categories, or led to an increase in part-time employment. However, the ACA could cause a shift towards part-time work in the future as the mandate takes effect.